BP’s post-Deepwater divestitures continue

Wesley Loy

For Petroleum News

BP is continuing its campaign of divestitures in the wake of the Deepwater Horizon disaster in the Gulf of Mexico.

The British company’s latest deal is the sale of its giant Texas City, Texas, refinery. BP announced Oct. 8 it had reached an agreement to sell the refinery and a portion of its Southeast retail and logistics network to Marathon for $2.5 billion.

BP executives called the Texas City sale “the second major milestone in the strategic refocusing of our U.S. fuels business.”

In August, BP announced a deal to sell its Carson, Calif., refinery and related assets to Tesoro for $2.5 billion.

With the Texas City sale, BP said the total value of divestitures it has agreed to since the beginning of 2010 is now over $35 billion. The company said it expects to reach its goal of $38 billion by the end of 2013.

At one time after the Deepwater Horizon disaster, speculation was rampant that BP might sell its assets in Alaska, where it operates giant Prudhoe Bay and numerous other oil fields. But this hasn’t happened.

The Texas City refinery was the scene of an explosion in 2005 that killed 15 workers.

Fallout from that disaster continues, as the U.S. Occupational Safety and Health Administration on July 12 announced BP had agreed to pay more than $13 million in penalties to resolve most of the 439 citations the agency issued for “willful violations” of process safety management standards at Texas City.

BP has three other refineries, including the Cherry Point, Wash., refinery, a major destination for Alaska North Slope crude. The others are in Whiting, Ind., and Toledo, Ohio.

After the April 20 well blowout and sinking of the Deepwater Horizon offshore drilling rig, BP announced it would divest assets to raise cash.

The company has announced a string of deals quite recently.

On Sept. 28, BP said it had agreed to sell a chemical plant in Malaysia for $230 million.

On Sept. 13, BP announced it had agreed to sell its 18.36 percent nonoperated interest in the Draugen field in the Norwegian Sea to AS Norske Shell for $240 million.

On Sept. 10, BP said it had agreed to sell its interests in a number of oil and gas fields in the deepwater Gulf of Mexico to Plains Exploration & Production Co. for $5.55 billion.

BP announced the Carson refinery deal with Tesoro on Aug. 13, and on June 25 it announced a deal to sell its interests in the Jonah and Pinedale upstream operations in Wyoming to Linn Energy for more than $1 billion.

A much bigger deal could be near as BP looks to sell its half share in the huge TNK-BP venture in Russia.